So you got a billion-dollar valuation? That don’t impress me much!
At almost every forum, every conference, event, or smoke-break in the startup world, the conversation invariably moves to who got funded (and by whom) and what the valuation was. When I hear investors and media folks and just about everyone around me say: “Look at this company, it’s in the billion-dollar club, such a huge success,” I often disagree. But I smile and nod along, because if I raise the questions on what success means, why success has already been declared so early in the game and the trophies handed out, then pat comes the reply: are you jealous, are you a cynic and can’t appreciate another’s success? To me, however, success means something very different. To me, what the startup world calls success seems like a mirage in the desert, meant to keep you going to the next round of funding or a higher valuation.
I remember doing a fireside chat with a very big entrepreneur (someone whom the startup eco-system looks up to). On the sidelines, before going on stage, he mentioned the value that his venture commanded in the market. Of course, he said it politely and didn’t mean to brag about how large they’d become. Yet it left me oddly put out. Did he have to tell me the valuation when everyone in the ecosystem already knew it? Maybe he thought I was dumb or out of touch and needed to drive home the point about the valuation.
I often think of valuation and fundraising numbers, etc., as examination results: even if you score 80%, you end up feeling bad because the guy who got 90% is the only one considered “the dude.” And mind you, if you are in the 60% or 70% range then you are just not cool enough for the ecosystem we live in: investors and media and everyone with an opinion (which almost all of us have ;-) )
It’s quite like when I got an admission to St Stephen’s college. The feeling on campus was one of great pride – we were Stephanians, and that meant a lot. After all, this was the college where you needed 99%, if not 100% marks, in your class XII examinations to have got a seat in that college. After a while, though, I never quite understood what the fuss was about. Yes, it was a great college to be in, and we got a great education, but it was just a start to a long journey ahead. A great start but a start nevertheless.
I have fond memories of my time at St Stephens, but time is a great leveler. When I look back with a perspective that is tempered by time and experience (and a lot of setbacks and failures), I can’t help but liken it to the startup ecosystem. Getting funding is much like getting admission to a prestigious college. It’s a validation of your skills and your potential (and a bit of luck). But beyond that, what you make of that privilege is entirely up to you. When you leave at the end of three or four years, you are a different person, hopefully, one that has grown as a person over that time. With funding and valuation, however, the celebrations never seem to end.
A massive round of funding or a billion-dollar valuation automatically means repeated mentions in the media, animated discussions between all possible stakeholders in the entire ecosystem. It’s almost like mass worshipping. No doubt, getting funded or having your valuation skyrocket is a big deal. But are those metrics for real success? What was the aim of setting up a company and making money? Has that been forgotten? Then maybe it’s time to go back to the drawing board and remember what we set out to do. Understand where we’re going and never let ourselves forget why we started up in the first place: to build a solid business, a world-class company. Not to only run after higher GMVs, or similar vanity metrics. Funding and valuations are a means to an end, a means to grow a company, a means to grow as an individual, an entrepreneur, and a business leader.
In the long run, nothing much matters except the values we stand for and the relationships we build with people around us, including our customers. If that sounds too preachy, just remember that many of the big stories five years back have not only been forgotten but some no longer exist. Entrepreneurs who were best friends with every editor in town became pariahs overnight if a single metric plunged.
So in the long run, what will truly impress is not our valuation but the genuine value we build for ourselves and the world around us.
As I always ask, what is your story going to be down the line?
and while you are at it, enjoy the song which inspired the title of this article